As President-elect Donald Trump prepares to take office on Monday, the cryptocurrency sector is feeling particularly optimistic. Trump embraced the crypto industry during his presidential campaign, and many wealthy investors with ties to the industry supported him.
Trump was greeted with prolonged applause when he took the stage at the Bitcoin conference in Nashville in July. For nearly an hour, he laid out his cryptocurrency policy, suggesting he would “embrace” the industry and ensure the rules are “written by people who love your industry, not who hate your industry.”
“The United States will be the crypto capital of the planet and the global Bitcoin superpower,” he said.
Six months later, Trump is back in the White House and is expected to become a major ally of the fledgling industry. He has tapped several crypto-friendly business figures to fill key positions in his administration, including Paul Atkins to lead the Securities and Exchange Commission and venture capitalist David Sacks as AI czar and of cryptography. Cryptocurrency enthusiast tech billionaire Elon Musk has also become a major Trump ally and is expected to play a key role in influencing policy.
Cryptocurrencies are digital coins bought or sold online. Each transfer is tracked in a public ledger called a blockchain. The price of these assets rises and falls and has sometimes fluctuated significantly. Unlike conventional money, cryptocurrency is decentralized, meaning it is not controlled by a bank or government.
“It’s going to be a really interesting time,” said Hanna Halaburda, a cryptography expert at New York University.
Halaburda said cryptocurrency investors had a big reaction to Trump’s election. In the weeks and months following his victory, the prices of many cryptocurrencies have skyrocketed, including Bitcoin, which hit a record high of $108,000 in December. Halaburda said these spikes indicate that many in the industry believe the next four years will bring less regulation and more innovation.
“The price of cryptocurrency is almost entirely and, in some cases, entirely based on vibrations…,” she said. “There will be new innovations. There will be new experiments. And there will be new enthusiasm.”
Trump’s views on cryptocurrency appear to stand in stark contrast to the tough stance taken by the Biden administration. Biden’s SEC Chairman Gary Gensler has been aggressive in cracking down on crypto companies, filing fraud and money laundering lawsuits. When Trump pledged at the Bitcoin conference to fire Gensler upon taking office, he received the loudest applause of the night, a sign that Gensler has become enemy No. 1 for many in the industry. industry.
“I didn’t know he was so unpopular,” Trump joked after hearing the applause.
Gensler won’t give Trump a chance to fire him, announcing he will resign from office at noon Monday, just as Trump, whose family launched his own cryptocurrency business in September, is sworn in as president. In an exit interview with Yahoo Finance, Gensler did not back down from his aggressive stance toward cryptocurrency, calling many digital assets “highly speculative.”
“You have to ask yourself what the real use case is,” he said. “What is their value proposition? »
Crypto interests played a significant role in the presidential election, funding many crypto-friendly candidates. According to the watchdog group Open Secrets, three pro-crypto Super PACs have spent more than $130 million to get their supporters elected.
For example, in Ohio, $40 million was paid to Republican crypto supporter Bernie Moreno, who later unseated longtime Democratic senator Sherrod Brown. Brown’s defeat was a big victory for the crypto industry, as Brown chaired the Senate Banking Committee and came out in favor of stricter crypto regulation.
“This will be the most pro-crypto government we have ever seen,” said Kristin Smith of the Blockchain Association, which advocates for an “innovation-friendly policy environment for the digital asset economy.”
Smith said many in the industry support some regulation, particularly on third-party trading. Smith said proper regulation can help avoid fiascos like the collapse of crypto exchange FTX in 2022, after its CEO Sam Bankman-Fried funneled consumer money into other investments. Smith argued that proper regulation can weed out bad actors without crippling the new industry.
“This is a very exciting time to solidify U.S. leadership in this area by putting the appropriate regulatory framework in place,” she said.
